Are Homebuyers and Sellers the Only Ones Who Need Transportation? Or Mass Transit?

It would appear that Gov. Kaine thinks so. (thanks to Richmond Sunlight for pointing out this article)

Kaine is proposing a statewide 25-cent increase in the grantors tax, which is now 10 cents per $100 of assessed value, that owners pay on the sale of a house.

First, the grantor’s tax is paid based on the sales price of the house, not (thanks, Danilo) or the assessed value (still not corrected five days after the original article was published).

Nuts and bolts – currently the median price in the Charlottesville area is about $275,000. Thus, the grantor’s tax paid by the seller on that particular transaction would be about $275 – and that’s a lot of money! If the tax is increased to 25 cents $687.50. Note also that this tax is paid only when a property sells (which is happening less and less frequently).

Make no mistake – Virginia’s (and the localities’) transportation systems need help; they need maintenance and they need new infrastructure – roads, bike paths, rail lines – but taxing only one segment of the population that uses the system is wrong. It is difficult to get hard, accurate data on what percentage of people in this area own their homes, but let’s assume it’s anywhere from sixty to seventy percent. Thirty to forty percent of people in the area won’t pay this tax, yet they will still use our roads, buses, etc. This is not a question of fair, but one of whether this is a reasonable proposal.

One reason that the grantor’s tax is proposed is because it is a bit of a hidden tax – it’s just another one of those fees that gets thrown together on the HUD-1 at closing. In the hot market, no one questioned the tax; now every nickel counts.

Why not a broad-based tax that everyone would pay (gas tax), other than lack of political and intestinal will and fortitude?

To target one segment of the population for a tax that needs to be focused on the entire population, regardless of the state of the housing market, is not right.

The best prediction from the Washington Post article goes to lobbyist Charlie Davis

“At the end of the day, maybe putting a ‘lockbox’ on transportation funds, maybe a local taxing authority, but that is it. Give Kaine credit for pushing for something. The Republicans can be tagged as obstructionists but . . . Kaine came back with almost the identical plan that was shot down last year, so which is more foolhardy? But the session will provide ample opportunity for a lot of social interaction to discuss the presidential campaign and enjoy some wonderful cuisine at the Capitol snack bar.”

And he’s probably right.


Related posts

Whom should we tax?

A few Transportation bills

Text of Governor Kaine’s speech to the General Assembly


Transportation talk revs up in Richmond

Too funny not to post – Copy of the Republican Transportation Plan

Original article appeared at RealCentralVA, and appears here by request.


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3 Responses to Are Homebuyers and Sellers the Only Ones Who Need Transportation? Or Mass Transit?

  1. Jeremy Hart says:

    First off, I’m commenting without a solution because it’s an issue that won’t be solved in a blog comment. But I liked that you highlighted one of the larger issues we can’t seem to find a way to resolve:

    Thirty to forty percent of people in the area won’t pay this tax, yet they will still use our roads, buses, etc.

    How to implement a broad-based tax that catches everyone? I wonder if a gas tax would really work because already we’re seeing the inverse relationship between gas prices and miles driven. If that continued, the only people that would eventually be paying the tax would be real estate agents and truckers!

  2. I don’t understand why they are taxing people as they move OUT of the area rather than taxing those who are moving IN. Most of the sellers in Northern VA are moving completely out of state and won’t be using VA roads any time soon.

    And what about those who rent? They get to use the transportation without having to pay the tax? Someone please tell me how that’s fair to homeowners.

    There have got to be better solutions out there. They may be harder to put into action, but that shouldn’t be an excuse

    Jim – The Grantor’s Tax is actually based on the sales price OR the assessed value, whichever is greater. A few title companies around here found that out from the clerk of the court the hard way…

  3. Techchix says:

    Does anyone remember the added tax (1/2%, I believe) that was voted down a few years ago? I can’t help but think that if it had been passed NoVa would not have the troubles in which we currently find ourselves.

    THAT particular tax – to my best recollection – would have gone specifically for transportation infrastructure. We are paying for the sins of a previous vote… and now we think the Legislature is going to come to a decision in which NoVa is going to benefit. (yeah, right)

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